We contributed to the freely available Current State of Crowdfunding in Europe Report. It coincides with a call for better standards of data sharing and an agreed taxonomy. We agree!
The report, which is free to download, was created by the CrowdfundingHub in Amsterdam and incorporated contributions from some 30 collaborators of which twintangibles was proud and honoured to be one. Setting out a comprehensive overview of the state of crowdfunding in a range of different countries it is an impressive and valuable source of information and a testament to the growing importance of crowdfunding and alternative finance across a great deal of Europe and the wider world.
The report makes a number of overarching observations including the importance of a positive regulatory stance in the growth of crowdfunding and presents a general upbeat and optimistic view of the possibilities of crowdfunding.
Another key observation is that of the need to create more a more defined taxonomy for the sector and better standards of data sharing/reporting. I would wholeheartedly agree with both of these items. This has ever greater relevance as increasing numbers of old world finance operators ride on the coattails of crowdfunding to popularise new product offerings which have neither the awareness nor the benefits of crowd finance. This is a problem as it distorts people’s understanding of the sector and, more importantly perhaps, deprives the users of the specific and distinctive benefits that crowdfunding brings. At the same time many platforms exaggerate and distort their performance to position themselves more positively in an ever increasingly competitive marketplace and, in so doing, make the reporting of activity levels unclear and less than useful. It is essential for consumers, researchers, administrators, regulators and indeed all participants in the market place, to get access to a more coherent and comparable set of data based around shared standards in the interests of transparency, choice, measurement and practicality. Some kind of Dublin Core for data exchange and a manifesto for the crowd defining what is required for inclusion in the pantheon of crowdfunding, and the wider alternative finance sectors is a call we would echo and support.
What we would say in addition is that it cannot be left to vested interests or partisan actors to do this work as in such an immature market it would be unlikely to succeed! It might be that regulators might have a role to play in bringing this about but as few if any have any grasp of the subject matter they can’t operate alone and they must avoid being captured by lobby groups masquerading as sector representatives.